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After graduating high school, McFarlane entered the United States Naval Academy at Annapolis in 1955, where he graduated in 1959. He was the third member of his family to attend the Academy, after his uncle Robert McFarlane (1925) and his brother Bill (1949). At the academy he graduated in the top 15 percent of the class and lettered twice in gymnastics. He received an honorary doctorate from the Institute of World Politics in Washington, D.C. in 2014. He sang in the Chapel Choir, and was a Brigade Administrative Officer and 14th Company Commander.

Following graduation from the Naval Academy in 1959, McFarlane was commissioned a second lieutenant in the Marine Corps, where he served as a field artillery officer.

As a Marine Corps officer, McFarlane commanded platoons, a battery of field artillery howitzers and was the Operations Officer for an artillery regiment. He taught Gunnery at the Army Advanced Artillery Course. He was the executive assistant to the Marine Corps' Operations Deputy from 1968–1971, preparing the deputy for meetings with the Joint Chiefs of Staff. During this assignment he was also the Action Officer in the Marine Corps Operations Division for Europe/NATO, the Middle East and Latin America.

McFarlane served two combat tours in the Vietnam War. In March 1965, he commanded the artillery battery in the first landing of U.S. combat forces in Vietnam. While deployed during his first tour, McFarlane was selected for graduate studies as an Olmsted Scholar. McFarlane received a master's degree (License) in strategic studies with highest honors from the Graduate Institute of International Studies (Institut de Hautes Etudes Internationales, HEI) in Geneva, Switzerland.

In 1981, President Reagan appointed and the Senate confirmed McFarlane as Counselor to the Department of State.[2] In this post he assisted Secretary of State Alexander Haig.

In 1982, Reagan appointed McFarlane as Deputy National Security Advisor responsible for the integration of the policy recommendations of the Departments of State, Treasury and Defense. In 1983, he was appointed by the president as his Special Representative in the Middle East responsible for Israeli-Arab negotiations.[3]

McFarlane has been criticized for involving the United States armed forces in the Lebanon Civil War with gunship bombardment of Lebanese opposition forces which may have led to the 1983 Beirut barracks bombing where 241 American servicemen were killed.[4]

Following that assignment, he returned to the White House and was appointed President Reagan's National Security Advisor.[5] In that post, he was responsible for the development of U.S. foreign and defense policy. He was a supporter of the Strategic Defense Initiative (SDI or "Star Wars").

The Iran-Contra affair involved secretly selling arms to Iran and funneling the money to support the Contras in Nicaragua. As National Security Adviser, McFarlane urged Reagan to negotiate the arms deal with Iranian intermediaries, but McFarlane says that by late December 1985 he was urging Reagan to end the arms shipments.[6] McFarlane resigned on December 4, 1985,[7][8] citing that he wanted to spend more time with his family;[9] he was replaced by Admiral John Poindexter.[10]

The Iran-Contra affair came to light in November 1986 and a political scandal ensued. Disheartened, feeling abused by his former colleagues and in depression over the embarrassment for the president that his actions had contributed to, McFarlane attempted suicide with an overdose of 25 to 30 valium tablets [11] on February 9, 1987, saying he had failed his country.[12]

In 1988, he pleaded guilty to four misdemeanor counts of withholding information from Congress as part of the Iran-Contra cover-up.[13] He was sentenced to two years' probation and a $20,000 fine but was pardoned by President George H.W. Bush on Christmas Eve 1992.

He was an advisor to John McCain's 2008 presidential campaign.
Since 2009, McFarlane has been working in the southern region of Sudan and Darfur on intertribal relations and development projects. On September 30, 2009, the Washington Post published a story suggesting that McFarlane's contract for this work, which is supported by the government of Qatar, was the result of a request by Sudanese officials. McFarlane denied any improper contact with Sudanese officials or efforts to avoid disclosure of his work. The Washington Post article reported that some persons involved in peacemaking efforts in the southern Sudan region questioned the source and helpfulness of McFarlane's activities.[15] That article prompted FBI investigators to review McFarlane's activities in the Sudan. After an exhaustive probe that lasted three years and included search of his trash, email, and personal belongings, investigators concluded their search and did not file any criminal charges.[16]

In July 2011, McFarlane, in cooperation with former CIA director Jim Woolsey, co-founded the United States Energy Security Council,[17] sponsored by the Institute for the Analysis of Global Security.

^Smith, R. "McFarlane Calls SDI Pitch Misleading", Washington Post (1988-09-15): "Robert C. McFarlane, a key architect of President Reagan's 'Star Wars' plan to develop sophisticated defenses against Soviet ballistic missiles, said he has concluded 'There is no current basis for confidence that a survivable defensive shield is within reach' and that Reagan's announcement of it was misleading and simplistic."

^Shenon, Philip. "Ex-Official Says Bush Urged End to Iran Arms Shipments", New York Times (1989-01-23): "Robert C. McFarlane, the former adviser, said in a telephone interview that although Vice President Bush rarely expressed an opinion at such meetings, he supported Mr. McFarlane in urging that the shipments be stopped....At the December 1985 meeting, Mr. McFarlane recalled, he advised Mr. Reagan to end the arms operation....Mr. Bush, he said, made a similar brief statement at a White House meeting after Mr. McFarlane went to Teheran in May 1986."

Timberg, Robert (1996). The Nightingale's Song. Simon and Schuster. ISBN0-684-82673-9. Tells the stories of John McCain, James Webb, Oliver North, Robert McFarlane, and John Poindexter; the impact of the Vietnam War.